Heilig-Meyers CEO quits

TheAssociated Press

RICHMOND, Va. (AP) -- William C. DeRusha, the top executive at Heilig-Meyers Co. who expanded the retailer into a giant home-furnishings chain, has left the company after three years of disappointing results.

DeRusha, Heilig-Meyers' chairman and chief executive, had been CEO since 1984 and chairman since 1986. During that time, Heilig-Meyers grew from a chain of 101 stores with $120 million in sales to a high point in 1998 of 1,249 stores in 38 states and Puerto Rico with $2.73 billion in revenue.

But even though Heilig-Meyers' (HMY) stock has plummeted 95 percent during the past four years, DeRusha's employment agreements entitle him to $8.1 million in salary, bonus and other benefits upon his departure.

The lump-sum payment of that money could create problems for Heilig-Meyers with its lenders and further burden the company as it tries to retain its financial footing, the company stated in a filing with the Securities and Exchange Commission. The company said it is discussing with DeRusha the timing and amount of his severance package.

Donald D. Shaffer, the chain's president and chief operating officer since April 1999, was appointed Friday to replace DeRusha as CEO. A new chairman has yet to be named.

"It was just time to make a change in the company," DeRusha said Sunday.

As the company's top officer, DeRusha had come under increasing fire in the past year as Heilig-Meyers has struggled to make a profit and boost its stock price. The company lost money in each of the last three fiscal years.

The value of the stock has plummeted more than 80 percent in the past year. Since 1995, the stock has dropped from a high in the mid-$20s to a low of $1 last month.

John Baugh, an analyst with First Union Securities in Richmond, said DeRusha's departure is long overdue.

"This is like a baseball team that won the World Series for a couple years but then for the next six years they got worse and didn't win. At some point you fire the manager," Baugh said. "This step should have been taken prior to now."

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